Thursday, February 26, 2015

For those unfamiliar with Home Depot, it is an American home improvement warehouse store that operates in North America. Home Depot has had limited success expanding beyond North America. The stores are very large warehouses. Some people might refer to them as hardware stores, but that really isn't an appropriate name. They carry far more than a traditional small hardware store. They have a lumber area, a garden center, appliances, interior home stuff, lighting, tools, and so on. As a new home owner, Home Depot is now a store that I frequent more than any other store.

Recently I decided to change out the various light bulbs in use in our house with LED light bulbs. I researched different options and went to stores to see what they looked like. I decided on Cree brand bulbs (currently exclusive to Home Depot). I purchased 60-watt and 40-watt equivalent bulbs and a bunch of 65-watt equivalent flood light bulbs.

I found that Cree is a company that primarily manufactures the parts used by other bulb makers. They decided to get in to the bulb and light making business to increase adoption of the technology and to lower the cost for consumers. There is even a special page for the bulbs: http://creebulb.com/

On the day I purchased my bulbs, I found that Home Depot sold the bulbs in packs of 4 as well as individually. I had calculated my costs based on the individual pricing, but in the multi packs the bulbs were a bit cheaper. I paid $4.25 per bulb before sales tax. The individual price was $4.97 per bulb before sales tax. That was for the Cree Model #BA19-08027OMF-12DE26-2U100 (Internet #204592770, Store SKU #1000003071). The description for the product is 60W Equivalent Soft White (2700K) A19 Dimmable LED Light Bulb.

Pleased with the outcome, I started recommending these bulbs to friends who were looking at LED bulbs. In New Hampshire, a friend went to Home Depot to purchase the bulb and found it was $9.97 each. But as a New Hampshire resident, the power company gives you a $3 per bulb instant rebate at the register, so now it's only $6.97 per bulb. I was informed of the difference and thought that maybe I bought them on sale or something.

I checked online and they were still listed as $4.97 each individually. If I changed my store to a New Hampshire store, the price on the bulb changed to $9.97 each. What? I began looking in other states and found prices were all over the place. Here are the locations and stores I checked and the price advertised for the bulb mentioned above:

Location

Store Number

Price of Bulb

Alabama

8577

9.97

Alaska

1302

10.97

Arizona

486

9.97

Arkansas

1402

9.97

California

634

9.97

Colorado

1505

6.97

Connecticut

6210

4.97

Delaware

1608

9.97

Florida

256

9.97

Georgia

144

9.97

Guam

1710

11.47

Hawaii (Oahu)

1701

5.97

Hawaii (Maui)

1703

5.47

Hawaii (Kauai)

1705

10.47

Hawaii (Big Island)

8453

5.47

Idaho

1806

6.97

Illinois

1978

9.97

Indiana

2012

6.97

Iowa

2104

4.97

Kansas

2202

9.97

Kentucky

2315

9.97

Louisiana

367

9.97

Maine

2414

9.97

Maryland

2509

6.97

Massachusetts

2667

4.97

Michigan

2721

9.97

Minnesota

2843

6.97

Mississippi

2906

9.67

Missouri

3021

6.97

Montana

3101

9.97

Nebraska

3202

9.97

Nevada

3303

6.97

New Hampshire

3481

9.97

New Jersey

910

7.97

New Mexico

3503

9.97

New York

1263

9.97

New York City (Manhattan)

6177

10.67

North Carolina

3644

9.97

North Dakota

3701

9.97

Ohio

6857

9.97

Oklahoma

3906

9.97

Oregon

4013

6.97

Pennsylvania

4101

4.97

Puerto Rico

6402

10.97

Rhode Island

4285

4.97

South Carolina

1110

9.97

South Dakota

4301

9.97

Tennessee

8916

9.97

Texas

577

8.98

Utah

4403

5.97

US Virgin Islands

8622

10.67

Vermont

4501

4.98

Virginia

4632

9.97

Washington

4702

5.97

Washington, DC

2583

3.98

West Virginia

4802

6.97

Wisconsin

4909

9.97

Wyoming

6002

9.97

This list is only a sample of stores, but I tried to hit one in every state (sometimes more). The lowest price I found was a store in Washington, DC selling the bulb for $3.98. While the most expensive prices were found in New York City, Alaska, Kauai, the US Virgin Islands, and Puerto Rico. Actually, Guam wins here by offering the bulb at $11.47. You're probably better off buying your bulbs at the world's largest K-Mart if you are in Guam. A number of states offer the bulb at the price I paid, including 3 more states in New England. The standard price for the item appears to be $9.97 and special pricing adjusts from that. $6.97 and $5.97 appear to be common discounted rates. The majority of the states in the southeastern United States (where Home Depot is from) carry no discounts on these bulbs. Hawaii is a special case given its non-contiguous nature. Oahu has the bulb for $5.97, Maui and the Big Island have the bulb for $5.47, and Kauai carries the bulb at a whopping $10.47.

Home Depot clarified the pricing differences for me. In this case, the differences are related to power company and state incentives. Right now it is a common trend to reduce energy usage. LED bulbs are a cheap way to do that and some states and power companies are making deals with Home Depot to offer the bulbs at lower prices in those states. In Hawaii's case, the power companies are unique per island which explains the pricing differences there. Certain cases like New York City indicate a market difference being more likely. And some states, such as New Hampshire, have discounts for state residents. Those apply at the time of purchase meaning the store cannot advertise a lower price.

If you are looking at buying bulbs at Home Depot, I encourage you to look at stores near you in other states if that's possible. Border cities expose you to multiple markets. Kansas residents can save money buying bulbs in Missouri, for instance. Virginia and Maryland residents should buy bulbs in DC. New England residents should buy bulbs in one of the $4.97 states.

This is just one product at one store. Market differences always affect pricing, but I find this difference odd because it's really driven by government incentives and/or power company incentives. We had federal regulation mandating the phase out of incandescent bulbs, yet we have state regulations and state power companies that affect the pricing of replacement bulbs.